Vietnamese automaker VinFast says it plans to spend up to $2 billion to build an electric vehicle factory in India, the world’s third-largest auto market by sales.
The factory in southern India’s Tamil Nadu state will be the company’s first foray into India and follows VinFast’s launch of sales in the United States and other major markets.
The plan highlights the company’s commitment to a “vision of a zero-emission transportation future,” Tran Mai Hoa, the company’s deputy CEO of sales and marketing, said in a statement.
VinFast said it is committing $500 million in the first phase of construction and plans to transform the region around port city of Thootukudi into a “first-class electric vehicle production hub.” The factory will have a capacity to roll out 150,000 cars annually, it said. It gave few other details.
VinFast is part of Vingroup, a sprawling conglomerate that began as an instant noodle company in Ukraine in the 1990s that was founded and is run by Vietnam’s richest man, Pham Nhat Vuong.
This will be VinFast’s first foray into India and is part of a global expansion that has included exports of EVs to the United States. It is building a $4 billion EV factory in North Carolina, where production is slated to begin this year.
The company aims to be selling in 50 markets worldwide by the end of this year. In October, it said it plans to build a $400 million electric vehicle factory in Indonesia. It has started shipping EVs made in Vietnam to neighboring Laos to serve as a fleet for Green SM, an EV taxi operator that is mostly owned by VinFast’s founder.
Last year, VinFast listed its shares on Nasdaq, seeing them balloon in value with its market value shooting briefly above those of General Motors and Ford in late August. But investor enthusiasm has cooled down and the company lost more than $1.4 billion in the first three quarters of 2023.
While it has struggled to sell its EVs in the US and its early cars have received bad reviews, the company maintains that if it can succeed in the crowded and competitive American market, it can succeed anywhere.
India is one of the fastest-growing electric vehicle markets in the world. But more than 90 per cent of its 2.3 million electric vehicles are cheaper and more popular motorbikes, scooters, and rickshaws. The government has launched a $1.3 billion federal plan to encourage EV manufacturing and provide discounts for customers.
The plan is a key part of an effort by Indian Prime Minister Narendra Modi, who is seeking to win a third term in an election this year, to create manufacturing jobs in India.